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  • MCS,MBA(IT), Pursuing PHD
    Devry University
    Sep-2004 - Aug-2010

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  • Assistant Financial Analyst
    NatSteel Holdings Pte Ltd
    Aug-2007 - Jul-2017

Category > Accounting Posted 15 Dec 2017 My Price 10.00

HOMEWORK – Chapter 10

Please help me answer the questions and give me the explanation for each questions


HOMEWORK – Chapter 10 PLEASE ANSWER QUESTIONS WITH AN EXPLANATION OF WHY A CERTAIN ANSWER IS CORRECT 1. Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows? a. A project’s regular IRR is found by compounding the initial cost at the WACC to find the terminal value (TV), then discounting the TV at the WACC. b. A project’s regular IRR is found by compounding the cash inflows at the WACC to find the present value (PV), then discounting the TV to find the IRR. c. If a project’s IRR is smaller than the WACC, then its NPV will be positive. d. A project’s IRR is the discount rate that causes the PV of the inflows to equal the project’s cost. e. If a project’s IRR is positive, then its NPV must also be positive. 2. Which of the following statements is CORRECT? a. One defect of the IRR method is that it does not take account of cash flows over a project’s full life. b. One defect of the IRR method is that it does not take account of the time value of money. c. One defect of the IRR method is that it does not take account of the cost of capital. d. One defect of the IRR method is that it values a dollar received today the same as a dollar that will not be received until sometime in the future. e. One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid. 3. Which of the following statements is CORRECT? a. The NPV method was once the favorite of academics and business executives, but today most authorities regard the MIRR as being the best indicator of a project’s profitability b. If the cost of capital declines, this lowers a project’s NPV.
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CourseLover
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Status NEW Posted 15 Dec 2017 02:12 PM My Price 10.00

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